Eighteen years old

By Dan Kadlec

Here come the college years and very likely your last chance to make any kind of real impression on your child's money habits. He will go off to school (or work) and navigate his finances from here on out pretty much on his own. By now, he should have a credit card in addition to an ATM card and understand all about late fees, interest expense, the importance of paying bills on time and the scourge of making only minimum monthly payments. Young adults are often appalled to learn that a $5,000 balance can take 20 years to pay off through minimum payments. Meanwhile, the card company will reward them with an ever greater credit limit if their payments are on time, and before they know it they have more debt than they can repay. "They shake their head and say, 'Hey, I didn't think I was doing anything wrong,'" notes JumpStart's Levine. Knowing about credit is most essential at this age, and that includes understanding what a credit score is and how to find it and why it's important. But he should also be able to do things like evaluate if financial information is objective and current and use an online calculator to research things like car loans and mortgages. He should understand that student loans must be repaid with interest and have some idea what career he'll be pursuing before loading up on student loans he may never be able to repay.

Advice: Studies show that the single best indicator of future success is a child's willingness to delay gratification. Never stop reinforcing saving for long-term goals and offer to match his long-term savings $1 for every $2 he puts away to mimic saving in a 401(k) plan. If you are still paying him an allowance, do it in bigger, less frequent chunks (monthly or quarterly) so that he has to create and live with a budget. Talk about where the money came from that is in his college fund and what sacrifices were made to put it there and carefully review with him his monthly credit card statements  before he's packed off for campus.